This is a petition for review under
Rule 45 of the Rules of Court assailing the February 11, 2010 Decision[1] of
the Court of Appeals (CA), in CA-G.R. SP. No. 108035, which affirmed
the April 25, 2008 Decision[2] of
the National Labor Relations Commission (NLRC). The NLRC affirmed with
modification the December
29, 2006 Decision[3] of
the Labor Arbiter (LA) in NLRC OFW Case No. (M) 06-01-00057-00, entitled
“Alen H. Santiago v. Pacbasin ShipManagement, Inc./Esteban Salonga/Majestic
Carriers, Inc.”

The
Factual and Procedural Antecedents

Petitioner Alen H. Santiago (Santiago) entered
into a contract of employment[4]
with respondent Pacbasin ShipManagement, Inc. (Pacbasin), the local
manning agent of its foreign principal,Majestic Carriers, Inc. Under
said contract, Santiago
shall work as a “riding crew cleaner” with a monthly salary of US$162.00 for
two months.

On
February 2, 2005, Santiago boarded the
vessel M/T Grand Explorer. During his stint, he figured in an accident. On March 9, 2005, he was
accidentally hit by two falling scaffolding pipes while performing a task, and
his head, neck and shoulder were injured. He was rushed to RashidHospital
in Dubai where
he underwent a series of examination and treatment. Despite the treatment he
received, his condition did not improve. He continued to have headaches with
severe pain in his nape and shoulder. For this reason, it was advised that he
be repatriated to the Philippines.

On
March 17, 2005, two
days after his repatriation, Santiago
was referred to the company-designated doctor, Dr. Robert Lim (Dr. Lim) of
the Marine Medical Services at the MetropolitanMedicalCenter,
to undergo some tests. He underwent cervical spine and skull x-ray. His neck
injury was diagnosed to be a contusion, nape area and left, C5, C6, C7 radiculopathy,
mild sensorineural hearing loss, bilateral probably secondary to cochlear
concussion. On April 8, 2005,
he was referred to a neurologist and EMG/NCV was conducted. On August 13, 2005, after
several sessions of treatment and evaluation from March 17, 2005 to July 2005, Dr. Lim, in
coordination with the clinic’s orthopedic surgeon and EENT specialists, pronounced
that his hearing problem was cured and gave him a disability assessment of “Grade
12.”

On
October 10, 2005,
Santiago
underwent a CT scan of the head at his own expense. On the 23rd of
the same month, he was seen by Dr. Epifania Collantes (Dr. Collantes), a
neurologist. He was diagnosed to have cerebral concussion, C5-C7 Radiculopathy
secondary to trauma. In the clinical summary,[5] it
was stated, among others, that his motor exam was 5/5 on all extremities and
reflexes were normal; that there was no note of sensory deficits and the neck
was supple; that cranial CT scan showed no skull fractures and no brain
parenchymal lesions; that there was a showing of bilateral sclerosis of
mastoids; and that he was ambulatory and able to perform his daily chores, although
experiencing neck pains and headaches.

Despite
medical treatment, his condition showed minimal improvement. He continued to
experience a lingering pain in his nape, headaches and mixed type deafness.On February 16, 2006, he consulted Dr. Efren Vicaldo (Dr.
Vicaldo) of the Philippine Heart Center, who was not a company-designated
physician. After checking on his condition, Dr. Vicaldo issued a medical
certificate[6]
assessing his disability as Grade 7. He was also declared to be unfit to resume
work as a seaman. His medical state would require regular medication and that
it would take a considerable length of time before he would be considered
symptom-free.

Subsequently,
Santiago
demanded payment from Pacbasin for disability benefits pursuant to the
provisions of the POEA Standard Employment Contract. This demand, however, was
not heeded. Consequently, he filed a complaint for disability benefit, illness
allowance, and reimbursement of medical expenses, damages and attorney’s fees.

In
its defense, Pacbasin averred that during the time that Santiago was under medication, it shouldered
all the expenses; that it even paid him a total of one hundred twenty (120)
days of sickness allowance; that the findings of Dr. Vicaldo should not be
given more weight than that of Dr. Lim; and that since Dr. Lim categorized his disability
to be Grade 12, then the amount that he was entitled to receive was only
$5,225.00 and not the maximum amount of $60,000.00.

In
its decision dated December
29, 2006, the LA adopted the findings of Dr. Vicaldo that he was
totally and permanently disabled, entitling him to full disability benefits. Thus,
it disposed:

Dissatisfied with the ruling of the LA,
Pacbasin appealed the decision to the NLRC. On April 25, 2008, the NLRC partially granted its
prayer. It ruled that Santiago
was only entitled to partial permanent disability equivalent to grade 12 or the
amount of $5,225.00 plus 10% as attorney’s fees. Thus, the claim for total
permanent disability benefit and sickness allowance was disallowed. The
decretal portion reads:

WHEREFORE, premises considered,
respondent’s appeal is partially GRANTED. The Decision of the Labor Arbiter is AFFIRMEDsubject to MODIFICATIONS in that
complainant is entitled only to partial permanent disability equivalent to
grade 12 or the amount of US$5,225.00 plus 10% thereof as attorney’s fees. The
award of total permanent disability benefit (US$60,000.00) and sickness
allowance (of US$648.00) are vacated and set aside for lack of merit.

A motion for reconsideration was
filed by Santiago
but the same was denied.

Aggrieved,
Santiago
elevated the case to the CA. He insisted that he was entitled to the maximum
disability benefit of $60,000.00 because he was unable to perform his customary
work for more than 120 days. His basis for said position was the ruling in the case
of Crystal Shipping v. Natividad.[9]

Pacbasin
countered that the case of Crystal Shipping v. Natividad was already
abandoned and superseded by the case of JesusVergara v. Hammonia
Maritime Services.[10] In
said case, the Court ruled that a temporary total disability only becomes
permanent when so declared by the company-designated physician within the
period he is allowed to do so, or upon the expiration of the maximum 240-day
medical treatment period without the declaration of either fitness to work or
the existence of a permanent disability.[11]

The
CA, in its February 11, 2010
Decision, dismissed Santiago’s
appeal and affirmed the NLRC decision and resolution. The dispositive portion
of said decision is quoted below as follows:

WHEREFORE, in view of the foregoing, the
instant petition is hereby DISMISSED. Accordingly, the decision dated April 25, 2008 and
resolution dated November
28, 2008 both issued by public respondent commission are perforce affirmed
in toto.

The CA applied the case of Vergara where it was held that if the 120-day initial
period was exceeded and no declaration was made with respect to disability or
fitness because the seaman required further medical treatment, then treatment
should continue up to a maximum of 240 days. At any time within the 240-day
period, the seaman may be declared fit or disabled. If, however, the 240-day period
lapsed without any declaration that the seaman was fit or disabled to work, the
temporary total disability becomes a permanent total disability, which would entitle
the seaman for maximum disability benefits.

The
CA also wrote that since Santiago
was assessed by the company- designated physician to be suffering a Grade 12
disability within the 240- day period, then he was merely suffering from a permanent
partial disability and not a permanent total disability which would entitle him
to a maximum disability benefit of $60,000.00.

A motion for reconsideration was
filed but the CA denied it in its resolution dated November 12, 2010.

Hence,
this petition.

Santiago presents for evaluation the
following errors allegedly committed by the CA, to wit:

I.

THE COURT OF
APPEALS COMMITTED AN ERROR OF LAW IN NOT APPLYING THE RULE OF PERMANENT TOTAL
DISABILITY UNDER ARTICLE 291 OF THE LABOR CODE AND SEVERAL JURISPRUDENCE
SUPPORTING THE SAME.

II.

THE COURT OF
APPEALS COMMITTED AN ERROR OF LAW IN MISAPPLYING THE PROVISIONS OF THE POEA
STANDARD EMPLOYMENT REGARDING THE OPTION OF THE PARTIES TO SECURE THE OPINION
OF A THIRD DOCTOR.

III.

THE COURT OF
APPEALS COMMITTED AN ERROR OF LAW IN NOT SUSTAINING THE AWARD OF ATTORNEY’S
FEES IN FAVOR OF PETITIONER.[13]

The
core issue in this case is the question of whether or not Santiago is entitled to a maximum disability
benefit of US$60,000.00 on account of his being unable to perform work as a
seaman for more than 120 days.

The respondents, in their Comment,[14] state
that both the NLRC and the CA were correct in ruling that Santiago was not permanently and totally
disabled but was merely suffering from a Grade 12 disability under the POEA contract.
They claim that the prevalent rule now, as enunciated in Vergara, is
that the company-designated doctor overseeing the seafarer’s treatment is given
a maximum of 240 days to assess a seafarer with a disability or declare him fit
to work. It is only after the lapse of 240 days when the company-designated doctor
could not yet render a final assessment of the seafarer’s medical condition
that the latter shall be automatically considered permanently and totally
disabled and, as such, entitled to the maximum disability benefit.

Santiago, in his Reply,[15] argues
that the 120-day Presumptive Disability Rule is the prevailing jurisprudence in
this jurisdiction. According to him, this rule is not a novel one because as
early as in the case of GSIS v. Court of Appeals,[16]the Court has ruled that if an employee is unable to perform his customary
job for more than 120 days then said employee suffers permanent total
disability regardless of whether or not he loses the use of any part of his
body.

The Court finds no merit in the petition.

The
contention of Santiago, that he was entitled to a permanent total disability
benefit as he was unable to perform his job for more than 120 days, is not
totally correct. This issue has been clarified in Vergara where it was
ruled that the standard terms of the POEA Standard Employment Contract agreed
upon are intended to be read and understood in accordance with Philippine laws,
particularly, Articles 191 to 193 of the Labor Code, as amended, and the
applicable implementing rules and regulations in case of any dispute, claim or
grievance.

In the recent case of Magsaysay
Maritime Corp. v. Lobusta,[17] this
Court also referred to, and applied, the ruling in Vergara in this
manner:

Article
192(c)(1) under Title II, Book IV of the Labor Code, as amended, reads:

ART. 192. Permanent total
disability. – x x x

x x
x

(c) The
following disabilities shall be deemed total and permanent:

(1)
Temporary total disability lasting continuously for more than one hundred
twenty days, except as otherwise provided in the Rules;

x x x x

Section
2(b), Rule VII of the Implementing Rules of Title II, Book IV of the Labor
Code, as amended, or the Amended Rules on Employees’ Compensation
Commission (ECC Rules), reads:

Sec. 2. Disability.
– x x x

(b) A disability
is total and permanent if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period exceeding 120
days, except as otherwise provided for in Rule X of these Rules.

x x x x

Section 2, Rule X
of the ECC Rules reads:

SEC. 2. Period
of entitlement.— (a) The income benefit shall be paid beginning on the
first day of such disability. If caused by an injury or sickness it shall not
be paid longer than 120 consecutive days except where such injury or sickness
still requires medical attendance beyond 120 days but not to exceed 240 days
from onset of disability in which case benefit for temporary total disability
shall be paid. However, the System may declare the total and permanent status
at any time after 120 days of continuous temporary total disability as may be
warranted by the degree of actual loss or impairment of physical or mental
functions as determined by the System.

x x x x

According
to Vergara, these provisions of the Labor Code, as amended, and
implementing rules are to be read hand in hand with the first paragraph of
Section 20(B)(3) of the 2000 POEA Standard Employment Contract which reads:

Upon sign-off from the vessel for medical
treatment, the seafarer is entitled to sickness allowance equivalent to his
basic wage until he is declared fit to work or the degree of permanent
disability has been assessed by the company-designated physician[,] but in no
case shall this period exceed one hundred twenty (120) days.

Vergara continues:

As
these provisions operate, the seafarer, upon sign-off from his vessel, must
report to the company-designated physician within three (3) days from arrival
for diagnosis and treatment. For the duration of the treatment but in no case
to exceed 120 days, the seaman is on temporary total disability as he is
totally unable to work. He receives his basic wage during this period until he
is declared fit to work or his temporary disability is acknowledged by the
company to be permanent, either partially or totally, as his condition is
defined under the POEA Standard Employment Contract and by applicable
Philippine laws. If the 120 days initial period is exceeded and no such
declaration is made because the seafarer requires further medical attention,
then the temporary total disability period may be extended up to a maximum of
240 days, subject to the right of the employer to declare within this period
that a permanent partial or total disability already exists. The seaman may of
course also be declared fit to work at any time such declaration is justified
by his medical condition.

x x x

As
we outlined above, a temporary total disability only becomes
permanent when so declared by the company physician within the periods he is
allowed to do so, or upon the expiration of the maximum 240-day medical
treatment period without a declaration of either fitness to work or the
existence of a permanent disability.

To
be sure, there is one Labor Code concept of permanent total disability,
as stated in Article 192(c)(1) of the Labor Code, as amended, and the
ECC Rules. We also note that the first paragraph of Section 20(B)(3) of the
2000 POEA Standard Employment Contract was lifted verbatim from the first
paragraph of Section 20(B)(3) of the 1996 POEA Standard Employment Contract, to
wit:

Upon sign-off from
the vessel for medical treatment, the seafarer is entitled to sickness
allowance equivalent to his basic wage until he is declared fit to work or the
degree of permanent disability has been assessed by the company-designated
physician, but in no case shall this period exceed one hundred twenty (120)
days.

[Emphasis supplied]

In said Magsaysay
Maritime Corp. case,the employee (Oberto Lobusta) was eventually
awarded the maximum disability benefit of $60,000.00. Applying the Vergara case, the Court ruled
that he was suffering from permanent total disability because the maximum
240-day (8 months) medical treatment period expired with no declaration from
the attending physician that he was already fit to work. Neither was there a
declaration that Lobusta was afflicted with a permanent disability. From May 22, 1998, his initial
examination, to February 16,
1999, when he was still prescribed medications for his lumbosacral
pain and was even advised to return for reevaluation, the number of days would
be 264 days or 6 days short of 9 months,[18]
way beyond the prescribed 240 day period.

In
contrast, in the case at bench, two days after repatriation on March 17, 2005, Santiago underwent
several tests and treatment. On April 8, 2005, a neurologist
conducted EMG/NCV on him. On August 13, Dr. Lim, the company-designated
physician, opined that he was suffering from a “Grade 12” disability only, not
a permanent total one. Counting the days from March 17 to August 13, this
assessment by Dr. Lim was made on the 148th day, more or less, and,
therefore, within the 240-day period. Thus, Santiago’s condition cannot be considered a
permanent total disability that would entitle him to the maximum disability
benefit of $60,000.00. To stress, the rule is that a temporary total disability
only becomes permanent when the company-designated physician, within the 240
day period, declares it to be so, or when after the lapse of the same, he fails
to make such declaration.

Santiago relies too much on the Crystal
Shipping case for his permanent total disability claim. Unfortunately, his
reliance on the ruling in said case is misplaced. In the Vergara case,
this Court held in resolving the seeming conflict between the two cases by stating:

x x x This declaration of permanent total
disability after the initial 120 days of temporary total disability cannot,
however, be simply lifted and applied as a general rule for all cases in all
contexts. The specific context of the application should be considered, as we
must do in the application of all rulings and even of the law and of the
implementing regulations.

Crystal Shipping was a case where the seafarer was
completely unable to work for three years and was indisputably unfit for sea duty “due to
respondent’s need for regular medical check-up and treatment which would not be
available if he were at sea.” While the case was not clear on how the initial
120-day and the subsequent temporary total disability period operated, what
appears clear is that the disability went beyond 240 days without any
declaration that the seafarer was fit to resume work. Under the circumstances,
a ruling of permanent and total disability was called for, fully in accordance
with the operation of the period for entitlement that we described above.[19](Emphases supplied)

Furthermore, theCourt takes
note that even after Santiago
was informed by Dr. Lim of his finding, he sought the opinion of independent
doctors. First he went to see Dr. Collantes, a neurologist, who diagnosed him to
have cerebral concussion, C5-C7 Radiculopathy secondary to trauma. It is
interesting to note, however, that the clinical summary stated, among others,
that his reflexes were normal and he was ambulatory and able to perform his
daily chores although he still experienced neck pains and headaches. These
findings negate a claim for total disability.

Finally, Santiago went to see Dr. Vicaldo of the
Philippine Heart Center, whose findings also belied his claim for permanent
total disability. The doctor, after only a single session, gave him a
disability grading of 7, which would not entitle him to a permanent total
disability compensation.

At any rate, said finding ought not to be
given more weight than the disability grading given by the company-designated
doctor. The POEA Standard Employment Contract clearly provides that when a
seafarer sustains a work-related illness or injury while on board the vessel,
his fitness or unfitness for work shall be determined by the company-designated
physician. However, if the doctor appointed by the seafarer makes a finding
contrary to that of the assessment of the company-designated physician, the
opinion of a third doctor may be agreed jointly between the employer and the
seafarer as the decision final and binding on both of them.[20] In
this case, Santiago
did not avail of this procedure. There was no agreement on a third doctor who
shall examine him anew and whose finding shall be final and binding. Thus, this
Court is left without choice but to uphold the certification made by Dr. Lim
with respect to Santiago’s
disability.

WHEREFORE, the petition is DENIED.Accordingly, the February 11, 2010 Decision of the
Court of Appeals, in CA-G.R. SP. No. 108035, is AFFIRMED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate
Justice

WE CONCUR:

PRESBITERO
J. VELASCO, JR.

Associate Justice

Chairperson

DIOSDADO M.
PERALTAROBERTO A.
ABAD

Associate
JusticeAssociate Justice

ESTELA M.
PERLAS-BERNABE

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.

PRESBITERO
J. VELASCO, JR.

Associate Justice

Chairperson,
Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

3. Upon sign-off from the vessel for medical treatment, the seafarer is
entitled to sickness allowance equivalent to his basic wage until he is
declared fit to work or the degree of his permanent disability has been
assessed by the company-designated physician, but in no case shall this period
exceed one hundred twenty (120) days.

For this purpose, the seafarer shall submit himself to a
post-employment medical examination by a company-designated physician within
three working days upon his return except when he is physically incapacitated
to do so, in which case, a written notice to the agency within the same period
is deemed as compliance. Failure of the seafarer to comply with the mandatory
reporting requirement shall result in his forfeiture of the right to claim the
above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a
third doctor may be agreed jointly between the Employer and the seafarer. The
third doctor’s decision shall be binding on both parties. (Emphasis supplied)